Christ Church along Old Hickory Boulevard is fighting its property tax dispute in state appellate court. / File / The Tennessean

Written by

Bobby Allyn

The Tennessean

Advocates for a South Nashville megachurch argued in the Tennessee Court of Appeals this morning that a gym, bookstore and cafe on its property “fit the spiritual needs of the congregation” and thus should not be subject to property taxes.

It is the same argument attorneys for Christ Church along Old Hickory Boulevard have been making for years, in a standoff that arose in 2007 but made its way to the appeals court only Wednesday. The dispute began after a tax assessor found that several facilities on the 40-acre property operated like a business and could not be exempt from paying taxes.

In February, a lower court found that the Tennessee State Board of Equalization, the state’s tax exemption authority, has the right to ask the church to pay $425,000 in taxes on the facilities in question.

The annual property tax bill on the three facilities totals $80,000, but state authorities are asking the church to pay the sum for the past five years or so.

If the church paid the annual tax bill, they would “have to shut down significant parts of our ministry,” said the church’s attorney, Eric Stanley of the Alliance Defense Fund, a group that says it fights for religious freedom. “Churches pay back a lot more to society than they pay in taxes.”

Attorney Lora Fox, representing Metro government, said not paying taxes gives the church an uneven market advantage. “It’s not fair to other entities that are paying taxes,” she said.

Stanley argued that the facilities are integral to the church’s mission of “evangelizing and building up its members,” noting that state law exempts college bookstores and hospital gift shops from paying property taxes.

The church’s cafe may appear to be a business, Stanley said, but it is run by a pastor and serves as a gathering place for the congregation.

“If a Sam’s Club were run by a pastor, would it qualify?” asked Judge Holly Kirby.

That’s not an apt comparison, Stanley countered, because Sam’s Club is a for-profit business. He said the church reinvests its proceeds to further its mission.

Other churches in Middle Tennessee have in-house bookstores. Mount Zion Baptist Church, for instance, has two — one on its church campus in Antioch and the other at its Old Hickory Boulevard location. The church pays property taxes on each.

Tax issue stems from 2004 dispute

In 2004, after the church built the additions to its building, it reapplied for its property tax exemption. Three years later, the state excluded the bookstore and the gym, which make up about 12 percent of the building.

Because the bookstore resembled a commercial store and the gym charged membership fees, the state decided that those facilities were not entitled to tax breaks.

Since then, church leaders have slowly made their way through an appeals process.

A court ruling is pending.

Fox, the Metro attorney, questioned how some of the bookstore’s merchandise, such as portraits of former President George W. Bush, advances a religious cause.

Christ Church has since closed its cafe and bookstore and opened a smaller bookstore selling only Christian books, Bibles and religious gifts. The church transferred the gym to the YMCA of Middle Tennessee — moves to stop the tax bill from climbing.